On cspan2. The reauthorization of the National FloodInsurance Program. Femas perspective. All members will have five days for extraneous materials to the chair for inclusion in the record. I recognize myself for five minutes for an opening statement. Thank you for appearing today for the second hearing for the housing subcommittee for the 118th congress. Fema plays a vital road through the Disaster Recovery efforts and today well explore the National FloodInsurance Program which existed over 50 years and until recently has operated in the same manner and relied on the same outdated tools since its creation and i just applaud the progress that youre making as flooding in the United States is a significant and costly problem for coastal and inland residents. Unfortunately, theres only one provider for nearly all Flood Insurance and the governmentbacked program which sells in a 93 to 95 of all rest tension Flood Insurance in the country. Thats not just a bad idea from the perspective of creating a workable insurance model, its also proved to be costly for taxpayers. Today the program finds itself 20. 5 billion in debt even after congress outrate for gauge, 16 billion just a few years ago. It seems clear to me that the program is in desperate need of reform and im glad that fema is bringing that reform. The process needs to start with this hearing and with the reauthoritization, which we hope this hearing will help us achieve the consensus to pass with legislation. Lately the committees not been too involved in the oversight of ongoing operations. Today is the first time weve heard from fema on nfip in over six years. Thats something we need to get more serious about if were going to modernize the program that was created before the moon landing in the 60s. This committee has an Important Role to play in its oversight of nfip and congress can identify whether the program is operating in an effective and transparent manner. Congress, however, has been missing in action from that job as the previous majority left the program on autopilot for shortterm extensions and Appropriations Bills and frankly the previous republican majority didnt finish the major reform. Thats only not only removed us from the process, its made the program vulnerable to uncertainty for the policy holders. We should do better. And while congress does this important work of reforming the program on a longer term basis, ive introduced hr1392, the extension act of 2023 which would authorize the program through at least december 2024. This bill would not only avoid a lapse in coverage, but would give the committee the time and deadline freedom it needs to do a deeper dive into Flood Insurance reform and conduct additional insurance on stake holders and a reauthorization. This work is crucial and will ensure that the program is moving in the right direction for taxpayers, policy holders and particularly, given femas recent internal work, to incorporate industry best practices and technology into its management of the program. That includes most notably. The work regarding adoption of the risk rating 2. 0 methodology which is a transformative to modernize how accurately measures flood risk. Its a good first step in moving towards longterm financial visibility for nfip and one that certainly deserves our attention to ensure this program can for those most at flood events and for years to come. I look forward to exploring it and femas other recent modernization acts with you today and so, we may have a set of policy recommendations for congress on our forms that will get this program on a sustainable path. With that, i thank our witness for this testimony today and ill look forward to the conversation and i yield and i now recognize the Ranking Member, Emanuel Cleaver from missouri for four minutes for an opening statement. Thank you very much, mr. Chairman. Let me preface my comments to saying i look forward to working with you. We have to give a great deal of our time and interest and creativity to resolve. Floods are the most frequent and Severe Weather threat and the costliest Natural Disaster facing the United States of america. Flooding events have occurred in all 50 states and 98 of u. S. Counties. Accord to go the department of Homeland Security being 90 of Natural Disasters in the United States involve flooding. Super charged by Climate Change, these Natural Disasters are increasing in both frequency and severity. Shortly after i was elected, katrina hit and at that time our Ranking Member ms. Waters, ms. Biggers led the delegation down the mississippi and we saw what devastation occurred in that area. And since katrina on in new jersey and new york, the east coast, we need to address this issue. Hurricane katrina was destructive and cost a great deal of money, the costliest flood if u. S. History which means the National Flood program was hit with major losses and industrial struggling 16. 2 billion for hurricane katrina. 1. 3 billion for hurricane irene. 8. 8 billion for hurricane sandy. And 1. 1 billion for hurricane irma. 1. 5 billion for Hurricane Ida and others and the nfip is endispensible to the resiliency of American Communities and five million policy holders. Many of these families are low or moderate income and due to the Affordable Housing crisis the hearing has not held yet on that congress. However, the growing strength of floods and storms that caused them are increasingly straining Financial Health of the nfip. The nfip is over 20 million in debt and the program pays well over 1 million a day in u. S. Treasury interest. This is the Third Largest by cost. In no uncertain terms, its fiscally unsustainable and it should should include the territories and in many ways dealt with almost as if they were stepchildren to the United States of america. In no unclear terms, the Current Program is fiscally unsustainable. Nfip reauthorization and what should be a longterm reauthorization is an opportunity to put the program on sound financial footing, increase risk analysis and communication, improve Community Resilience and make technical and operational enhancements to the program. This committee has an opportunity to make our families businesses and communities safer and more resilient and to build and rebuild in a way that meets the challenge of the reality of Climate Change. I am interested to see the republican plan on flood reform. As i just mentioned to the chair, and i intend to make myself available to work with him and thank you very much, i yield back. The Ranking Member yields back and the chair now recognizes the chairman of the full committee. Mr. Mchenry for one minute. I want to thank the chair and the Ranking Member and thank members of the committee for workening a bipartisan way to work on the work that then chairman waters and then i, worked on reform in a balanced way and we reported that without a dissenting vote and dealt with a lot of large challenging issues there and we seek to work in a bipartisan way and we thank the administrator for being here and his leadership and his teams leadership to take into account the changing climate and make sure that we take care of those in our society that are challenged to pay these bills. We make sure that we have a program thats current with the risks and balance to the American People and i want to thank the subcommittee for dealing with this. And for a point of privy want to recognize long Time Staffing member, ed scala, and for the first time, his mother is here. [laughter]. [applause] and so so beatrice, bonnie, eds sister and niece alexa, thank you for being here. Thank you for keeping tabs on ed. He has sharpened up this day because youre here and were grateful for that and im grateful for his advice as counsel, a long time key member of the Financial Service committee, works with democrats staff, and republicans staff and i count on his counsel every day. With that ill yield back. The chairman now recognizes Ranking Member of the full committee, ms. Waters for one minute. Thank you very much mr. Davison, i appreciate this hearing today. Congress designed the nfip to be selffunded through annual insurance premiums collected from policy holders. Currently drowning in 20. 5 billion in debt with a Million Dollars of interest accruing every single day. And i am just wondering what effect it would have if congress simply enacts a clean reauthorization of the nfip and maintains the status quo for the program and instead im not going to raise that request question now, but anxious to hear what is going to be said today. I want mr. Maurstad to explain to us how hes going to carry out the function of nfip. I want him to talk about money. I want him to talk about debt. And i want to get down to some real answers today. So with that, ill yield back the balance of my time. Ranking member yields back and today we welcome the testimony of david maurstad, fema administrator of the directorate and the Flood Insurance program. He was 25 years in Public Service and insurance. And received a master of Business Administration from the university of nebraska. We thank you for taking time to be here. You will be recognized for five minutes to give an oral presentation of your testimony. Without objection, your written statements will be made part of the regard. Mr. Mar maurstad, youre now recognized for five minutes. Good morning, ranking chem, chairman, ms. Waters, members of the subcommittee. Thank you for the opportunity to testify today regarding femas perspective of the National FloodInsurance Program. For more than 50 years nfip has been critical. And today Climate Change opposes a serious threat. The nfip requires meaningful structural change and since the last multiyear authorization in 2017, nfip has experienced 25 shortterm extensions and lapses. And potential policy holders to lose confidence in the nfip. We believe had a that 10year reauthorization with come hence is i have program reform is vital. We propose 17 recommendations to reform the nfip that are guided by four key principles, first, ensuring that more americans are covered by insurance making it more affordable. Flood insurance is unaffordable for some policy holders. Under current law fema does not have the authority to charge premiums based on a policy holders ability to pay. Although they offer mandatory discounts and subsidies, these do not take into consideration the policy holders financial need and in fact, make Risk Communication difficult because people may equate lower cost with lower risks. Reforms that address affordable, such as the use of a targeted aadvance program can offer low and moderate income, current and prospective a graduated risk premium discount while providing them with the knowledge of the full risk to communicate a propertys flood risk. And its realtime with tools to manage flood risk. Reforms that increase the scale and frequency of flood mapping and emerging priorities and technologies into flood hazards and flood Risk Identification process, will expand the ways in which nfip communicates risk. Raising an awareness of true flood risk enables people to make informed decisions about their family and property. Home buyers and renters may lack awareness about flood risk when they complete real estate transactions. Reforms that would require states to establish minimum flood risk reporting requirements for sellers and lessors before transactions close would address this challenge. Additionally we need to inform how we measure the flood risk. They require flood hazard information thats more robust than the special flood hazard area and 100 chance flood elevation. Third, reducing risk by addressing extreme repetitive lost properties. Previous losses are a significant indicator of risk. If a property flooded before, this is a high likelihood they could flood again. And two or more paid losses nearly 3,000 have suffered 10 or more losses. Nfip must have better tools to address insured structures that experienced multiple flood claims. Almost 3 of insured properties are considered unmitigated, repetitive loss properties. Reforming the nfip to institute an objective threshold to deny coverage to the most flood prone structures would discourage unmitigated rebuilding in areas with a history of flooding and reduce risk, financial risk to the nfip while ensure coverage is still widely available to individual families and businesses who might not be eligible for private market average. And fourth, instituting a sound and transparent financial frame work that allows the nfip balance affordability and fiscal soundness. Without in in place, longevity and sustainability of the program is at risk. Nfip currently carries 25 billion in the treasures and the interest in fy23. The program is burdened and unable to pay the debt in full. Canceling the nfips debt provides a Solid Foundation with supporting financials around borrowing, future enhanced liquidity and these reforms address fundamental structural challenges and are essential to building a viable, sustainable, the nation needs and deserves. Its critical that congress provides needed operation and currently reform the nfip. We look forward to working with congress and develop a longterm solution that addresses the needs of the nfip its policy holders and the nation. Id be pleased to answer any questions. Thank you, mr. Maurstad. We now turn to member questions. And i recognize myself for five minutes for questions. And thank you for addressing the need for reform for 15 years now the Government Accounting Office has consistently labored nfip as quote, high risk programs, calling it out for several things, including premium rates that do not reflect the full risk loss, transferring some financial burden from individual Property Owners to taxpayers and lack of transparency that leads to quote, mistakenly perceived leads to some, quote, mistakenly perceive theyre not at risk of flood loss. Unresolved affordability issues which you addressed for policy holders. All of that seems like a grim picture with the job that youve walked into. Can you paint for us, a picture of what the programs future looks like if we dont reform nfip and how critical that we bring this 50yearold program into the 21st century with modern tools and techniques . Yes, first of all, it starts with the financial structure of the program. It has already been mentioned a number of times. Being saddled with the interest cost that is provide no real benefit to the program is harmful. If we look at the proposed recommendations that weve provided, that include the development of a sound Financial Framework. If we do nothing, theres a 2 chance that at the end of 10 years, the National Fund will have dollars more than what they started. If we enact all of the proposals that weve put forward theres 81 chance. 81 chance not 2. 81 chance that the fund will have more resources at the end of that 10 years, so structurally as we look at the nfip as we look at flood risk grant and identification, and the insurance, having that sound Financial Framework is critical for the sustainability of the program. Thank you for that and i applaud you, frankly, for the progress you have made on the i. T. On that as well. And one of the things that comes up often is mapping. How can home owners appeal or challenge a zoning determination. I know under risk rating 2. 0, flood ratings are no longer an element for nfip rate, but theyre important for the application of mandatory purchase requirements for properties under the Flood Disaster act in 1973 as well as determining eligibility for policy holder discounts like the newly mapped status, so on, so forth. Can you describe what the current mapping appeals process is for home owners under risk rating 2. 0 and how that is distinct from the mandatory purchase requirement . So, the investment of probably over 5 billion in the 22,400 communities, flood maps across the country, is vital as we continue to look at how we can best identify flood risk. Theyre for two primary purposes. As you indicated, one outlined the special flood hazard area, the high risk area where communities then agree in participating with the program to regulate construction in that area. And the second is the mandatory purchase requirement. Dealing with the first, its a local ordinance, so to start with, you can look to the local government to make sure that your property is accurately reflected in the local communitys Flood Insurance map. Beyond that, we have two ways. You can go directly to fema for a flood map amendment and then theres also a second. So, we encourage policy holders to work with their agents, to work with their community leaders, and the regional staff that are there to